Kraken CEO Blasts UK Crypto Regulations: ’Retail Investors Are Getting Squeezed’
UK regulators just made Kraken's boss see red—and he's not mincing words.
The exchange chief torched Britain's crypto rules as 'innovation-choking bureaucracy' that's driving retail traders into riskier offshore markets. Sound familiar? *cough* post-Brexit financial hub dreams *cough*
Behind the rant: London's Financial Conduct Authority now requires crypto firms to slap risk warnings on ads and impose 24-hour cooling-off periods. Perfect for protecting investors from themselves—and guaranteeing they'll seek returns elsewhere.
The kicker? These 'protections' arrive just as institutional money floods into crypto ETFs. Another case of regulators baby-proofing the stairs after Wall Street already fell down them.
FCA Rules Aim To Protect Investors With Risk Warnings And Appropriateness Checks
The Financial Conduct Authority brought in financial promotion rules in late 2023. Firms must post clear risk warnings, ban incentives to invest, build positive frictions, and run appropriateness checks to assess whether customers understand crypto risks. Companies marketing to UK users must comply.
Sethi said the added hurdles deter some customers from investing at all, which could mean missing potential gains. He argued that excessive friction slows transactions and undermines user experience.
According to the FCA, its rules help people understand both benefits and risks.
Regulators Tighten Grip As FCA Sues HTX Over Crypto Promotion Breaches
Executives have long said Britain’s stance is too cautious. Calls to loosen rules have grown this year, as the US under President Donald TRUMP has become more welcoming to digital assets.
Enforcement has also stepped up. The FCA sued HTX last month for failing to comply with promotion rules. The exchange is linked to Justin Sun, who has invested millions of dollars in Trump’s digital asset ventures.
Kraken, founded in 2011, ranks among the 15 largest exchanges by trading volume. Sethi, who co-leads Kraken with David Ripley and chairs Tribe Capital, said tighter UK protections leave British users unable to access about three quarters of the products available to US customers, including higher-yield offerings and some decentralised finance lending.
The San Francisco exchange is preparing for a public listing as early as 2026. Bloomberg reported that Kraken is working with Morgan Stanley and Goldman Sachs to lead the offering.
Expansion remains a focus. In March, Kraken said it WOULD acquire derivatives platform NinjaTrader in a $1.5b deal, a move that would deepen its presence in futures and options while it navigates diverging regulatory paths in the UK and the US.
